UPI Merchant Discount Rate Implementation Reportedly Delayed, Fintech Stocks Fall

Shares of prominent Indian fintech companies Paytm, Pine Labs, and MobiKwik saw a significant drop on Friday amidst reports of a potential delay in the implementation of a Merchant Discount Rate (MDR) on specific Unified Payments Interface (UPI) transactions.

Paytm's stock fell as much as 10% to an intraday low of ₹1,560.60 (approximately $18.80). By midday, it was trading 5.21% lower at ₹1,643 (approximately $20.10).

Pine Labs experienced a 4.3% decline, trading at ₹169.90 (approximately $2.10), while MobiKwik's shares were down 5.7% at ₹241.25 (approximately $2.95).

The sell-off is linked to news suggesting the rollout of MDR on select UPI transactions could be postponed from its planned October 15 implementation date to January 1, 2027. This potential deferral would allow eligible merchants to continue processing UPI payments without the MDR fee through the upcoming festive season.

The UPI and Services Steering Committee, led by the National Payments Corporation of India (NPCI), met to discuss the proposed rollout. Reports indicate the committee is also considering raising the exemption threshold to businesses with an annual turnover of up to ₹40 Lakh (approximately $49,000). Reserve Bank of India Governor Sanjay Malhotra commented that a small MDR is unlikely to significantly impact UPI transaction volumes.